Dallas-based Southwest Airlines announced Tuesday that it would no longer allow free checked baggage beginning on May 28. Only the members of its A-list loyalty program or business passengers will be exempt from the fees. “We have tremendous opportunity to meet current and future customer needs, attract new customer segments we don’t compete for today, and return to the levels of profitability that both we and our shareholders expect,” said Bob Jordan, CEO of Southwest, in a press release.
‘Bags fly free’ no more
Since its founding in 1971, Southwest had two perks: open seating and bags fly free. But now both are gone, first, they did away with open seating and then free baggage. CNN called this move a “seismic shift” for the Southwest and the ‘Bags fly free’ policy which was also its tagline set Southwest apart from its competitors.
Southwest didn’t immediately reveal how much the checked bags would cost. Regardless of the price, it will likely instantly boost its bottom line because Southwest has two to three times as many checked bags as other airlines, CNN reported adding that the shares of Southwest soared nearly 6 per cent in premarket trading after it announced its policy change.
Southwest said these two changes were necessary as the customers have been pitching for allocated seats. When people switch to a competitor from Southwest, the company said the No. 1 reason passengers cite is open seating. But the change will also help the company charge some passengers more for their tickets.
In another crucial change, Southwest announced that apart from Southwest.com, it would sell tickets on Expedia in an attempt to attract more customers. Southwest also announced Tuesday it will also start selling “basic economy” fares in May, which are low-priced tickets but with tons of restrictions.
